What New York Tells Us About Obamacare and the GOP's Proposal

The price of insurance plans in New York will drop 50 percent—partly because of the most controversial part of Obamacare, the individual mandate. "It’s not bargain-basement prices, but we’re going from Bergdorf's to Filene's here," Elisabeth Benjamin, vice president for health initiatives with the Community Service Society of New York, tells The New York Times. In October, when the Obamacare state exchanges go live, people in New York City who pay $1,000 a month for health insurance will be able to buy a plan for as little as $308 a month.

But the drop is big because the rates had a long way to fall from. The Washington Post's Sarah Kliff explains, "New York has, for two decades now, had the highest individual market premiums in the country." Why? Because insurers had to accept everyone, but there was no mandate that everyone sign up. Basically, it's what would happen if the Obama administration did what House Republicans demand, and stop the individual mandate from going into effect.

Earlier this month, the Treasury Department announced it was delaying till 2015 the Obamacare employer mandate—the requirement that businesses that employ 50 or more full-time workers offer insurance plans. The employer mandate, though it cut the cost of Obamacare, was widely seen as a bad idea and not central to the goal of universal health care coverage. Workers whose employers wouldn't cover health care would be required to buy it on the individual market. But House Republicans seized on Treasury's announcement, demanding that President Obama also delay the individual mandate, something they've fiercely fought for years. House Speaker John Boehner said on Tuesday, "It’s unfair to protect big businesses without giving the same relief to American families and small businesses." The Washington Post's Ezra Klein writes, "The Urban Institute has modeled the relief Boehner is talking about. It’s a funny kind of relief in that it leaves 13.7 million more people uninsured."

And, as Kliff explains, it would make those who did get individual insurance have to pay more. She writes:

[New York's] 1993 reforms not only required insurers to accept all customers; they also mandated that insurers charge everyone the exact same price. Young or old, healthy or sick, it doesn’t matter in New York: Everyone gets the same deal.

That meant sick people got a bargain, but healthy young people got screwed. So they didn't sign up. While in other states, premiums were expected to rise as more sick people were covered, in New York, prices were expected to fall, because healthier people would enroll.